Last-Minute Change to Tax Reform Bill Hardens Nonprofit Opposition

Last-Minute Change to Tax Reform Bill Hardens Nonprofit Opposition

Washington, DC - Tim Delaney, President and CEO of the National Council of Nonprofits, which advocates on behalf of the work of charitable nonprofits nationwide, released the following statement in response to the last-minute change in the House version of the Tax Cuts & Jobs Act to remove Johnson Amendment protections from all charitable nonprofits and foundations:

“On the next to last page of the House tax bill, changed at the last hour of the last day of committee action, comes the most outrageous act of political deviosity seen in Washington in decades. The Chairman’s last-minute changes to Section 5201 mean that every 501(c)(3) organization – charitable nonprofits, houses of worship, and private foundations – would lose the protection from demands by candidates for public office and their political operatives. This provision is vehemently opposed by the broad nonprofit community – charitable, religious, and philanthropic – plus state law enforcement. This provision must be rejected, and if not, the entire bill must be defeated.

“We say to all members of the House: Charitable nonprofits don’t want to be dragged into the toxic political wasteland. The false cries of ‘free speech’ and ‘religious liberty’ come with crocodile tears from self-serving partisans who can only see the world through a political lens instead of a moral compass. We will fight any provision to weaken the Johnson Amendment protections in the House and the Senate; and we will do so in the pulpits, and food banks, and editorial pages; and in town squares, public meetings, and everywhere people concerned about their communities come together. All are places that 501(c)(3) organizations, including houses of worship, have been able to advocate all along, just not electioneer.

“We neither need nor want this change in longstanding law. While couched in terms of ‘merely’ allowing endorsements, the provision has already been exposed by the Joint Committee on Taxation (JCT) as a billion-dollar shift in campaign dollars that would cost the U.S. Treasury billions. According to JCT, political contributors to candidate committees, PACs, and other dark money sources that can’t give donors a charitable tax deduction are likely to divert those billions to charitable, religious, and philanthropic organizations that will entitle the contributors to take deductions – all because of this last-minute change in the tax bill.

“We don’t want to be dragged into the political swamp; we don’t want corrosive partisanship to make us as ineffective as partisan government today; and we certainly don’t want our missions destroyed by those who think political money can take the place of honesty, values, and caring for communities.”

ADDITIONAL BACKGROUND

Section 5201 of the House tax bill aims to gut a law signed by President Eisenhower (sometimes called the “Johnson Amendment”) that has protected charitable nonprofits, houses of worship, and private foundations from the toxic divisiveness of partisan politics. Current law provides that 501(c)(3) organizations, as a condition of tax-exempt status and the ability to receive tax-deductible contributions, may not endorse or oppose candidates for public office or divert charitable assets from mission to support political campaigns. As now revised through the manager’s amendment, Section 5201 would create a giant loophole for all 501(c)(3) organizations, based primarily on the false allegation that religious speech is infringed by this longstanding and widely-embraced protection in the law.

The National Council of Nonprofits (Council of Nonprofits) is a trusted resource and proven advocate for America’s charitable nonprofits. Connecting the policy dots across all levels and branches of governments, the Council of Nonprofits keeps nonprofits informed and empowered to create a positive public policy environment that best supports nonprofits in advancing their missions. Working with and through the nation’s largest network of nonprofits – with 25,000-plus organizational members - we identify emerging trends, share proven practices, and promote solutions that benefit charitable nonprofits and the communities they serve.